Sat, May 24, 2003 - Page 6 News List

US tax-cut bill gets passed despite worries about debt

AP , WASHINGTON

The House passed a US$330 billion tax cut early yesterday that will deliver rebate checks to parents and larger paychecks to workers this summer. It gives President George W. Bush less than half the economic stimulus package he wanted but meets his Monday deadline.

The House voted 231 to 200 along party lines for the bill, which cuts taxes US$330 billion through the coming decade and sends US$20 billion in aid to financially troubled states over the next two years. The Senate scheduled a vote later yesterday.

Democrats said the cut, like two previous ones during Bush's tenure, will saddle future generations with debt.

"This is no victory for people who work every day because eventually this tax giveaway to the wealthy will have to be paid for," said Charles Rangel, the top Democrat on the House Ways and Means Committee. "You better believe that when the tab comes, it's the working people of this country who will be stuck with it."

Even though its US$330 billion in tax cuts through the next decade is less than a Senate bill that Bush dismissed last month as "little bitty," Bush praised the package. "The more money people have in their pockets, the more likely there is somebody that's going to be able to find work in America," he said.

Bush said he would sign the bill after votes are completed Friday by the House and Senate.

The last sticking point was how to distribute US$10 billion in new Medicaid assistance. The money is half the US$20 billion in new aid going to fiscally strapped state and local governments over the next two years, bringing the total cost of the package to US$350 billion, the maximum that moderate Senate Republicans would allow.

Democrats, who were largely shut out of negotiations over the bill, said its biggest impact will be to put the government deeper into debt. "They've done a triple back flip off the high board, and they've created a belly flop that all of us are going to feel," said Senate Minority Leader Tom Daschle.

More than half the US$330 billion tax cut will go to working individuals, married couples and families.

Meanwhile, the Senate and House passed their own versions of a US$400.5 billion defense spending plan for 2004 that would increase money for homeland security, development of new weapons and benefits for US troops.

Legislation in both bills includes more than US$70 billion for weapons purchases and US$9.1 billion for a missile defense system. The measures offer an average 4.1 percent pay raise for military personnel and new money to stop terrorism and the spread of biological and chemical weapons.

The Senate vote on Thursday was 98-1; the House vote was 361 to 68.

There was wide support for the 4.7 percent increase over what Congress approved last year. Thus, much of the debate was on such issues as exempting military bases from environmental protection laws, reorganizing civilian workers at the Pentagon and researching new, low-yield tactical nuclear weapons. House Democrats complained that they were barred from offering amendments on some of these issues.

Senate Democrats on Wednesday failed to retain a 1993 ban on the research and development of low-yield nuclear weapons. The administration says the ban will hinder the ability of US scientists and engineers "to explore technical options to deter national security threats."

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